How do I handle a situation where Buyer was not able to obtain loan financing, and gave notice of such fact to the Seller 2 days after the expiration of the 30-day loan approval period? Despite the delay in giving notice to the Seller, can Buyer still get his deposit back if the sale was contingent on loan approval?

Also, it appears Seller did not (yet) have title to the property, as he was in the process of purchasing the property from the original owner and then re-selling it to the Buyer. As long as Seller was in a contract to purchase the property, does he have the right to also enter in a contract for the sale of the same property?

To complicate matters even further, deposit is being held in Escrow, and Seller is claiming the escrow agent is withholding half of the deposit to pay for its fees.

The seller can recover damages for the breech. If there are specific fees (like the money to set up the trust account) it would be pretty cut and dry. Most real estate contracts allow the deposit to be taken specifically to defray these damages. Sounds like the deposit was pretty small if "half" is taken up on fees anyhow.

Because he only has to have title at closing.
However, it's not clear he doesn't own the property NOW.
Having deeded ownership and having any potential lose ends that the title insurer wants cleaned up are different concepts. It looks like these are being resolved. You can't use that to get out of your contract. Purchase owner's title insurance however to be sure.

If Seller can recover damages for breach (ie Atty fees for setting up Escrow Account), does that mean Buyer can recover at least part of his Deposit, or does Seller have right to keep the entire deposit if he so chooses?

I was hoping there would be at least some out for the Buyer that would allow him to recover his entire deposit, but it looks like his best option is to now agree to pay for atty fees and recover what is leftover.

Generally there is a liquidated damages clause in the contract that allows the seller to retain the deposit directly on breach. Since he has very documentable damages specifically relating to the administration of the sale that is all he is asking for, it's a slam dunk.

Your option is to honor the contract or deal with the consequences of the breach.

Other than a little delay (which appears to be to satisfy your side), it would appear he has not breached the contract. It seems your own remorse rather than anything the seller has done that wants to end this.

Short Sale Game

I signed a contract with a trustee who apparently was buying a short sale from the bank and then selling it to me (the listing agent never informed us of this fact until after the contract was signed - in fact his listing was inaccurate as well). Aparently the seller was able to negotiate with the bank since he is the holder of the land trust altough not the mortgagee.
After a week of signing the contract, the listing agent forwarded a letter of approval from the bank, with an addendum in which he stated that the deal was contingent upon approval from the bank. Two days letter he sent a letter of approval from the bank and asked us to close within 14 days. A week later, when we were ready to close, the seller's agent calls us and asks us for an extension because he learns to the negotiator/investing advisor to trustee wanted more money for "repairs" which were NEVER done to the property.

Long story short, they asked the bank to re-negotiate their numbers, AND THE BANK WILL NOT DO THAT, they have accepted their bottom line and THAT'S IT! So we (my lender and I) have been on hold with an underwritten loan for about a MONTH.

Finally today, they say that they don't want to buy the property at the amount the bank will accept and therefore they will not sell the property to us.

This breach of contract has a name, and I am sure someone out there knows it. Please advise. Also, they made us pay for appraisals ($600) and inspections ($600) and now they just walk away like nothing happened.

PLEASE GIVE ME YOUR INSIGHTS!!

Thanks

Originally Posted by FlyingRon

Generally there is a liquidated damages clause in the contract that allows the seller to retain the deposit directly on breach. Since he has very documentable damages specifically relating to the administration of the sale that is all he is asking for, it's a slam dunk.

Your option is to honor the contract or deal with the consequences of the breach.

Other than a little delay (which appears to be to satisfy your side), it would appear he has not breached the contract. It seems your own remorse rather than anything the seller has done that wants to end this.

Really?

Originally Posted by FlyingRon

My insight is that you should keep this in the other thread you started and not post your soap opera on to other's threads.

I have - as a member - the right to chose where to post my questions and I posted my inquiry where I deemed necessary. If you have no expertise/knowledge to share, don't answer. Some people are just so miserable - SOME PEOPLE - maybe not you but you post sure doesn't help prove me wrong.

I have - as a member - the right to chose where to post my questions and I posted my inquiry where I deemed necessary. If you have no expertise/knowledge to share, don't answer. Some people are just so miserable - SOME PEOPLE - maybe not you but you post sure doesn't help prove me wrong.

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